Ford To Make India Its SUV Production Hub And Expects Asia-Pacific Market To Account For 40 Percent Of Global Sales In 5 Years

Alan Mulally, President and CEO of Ford Motor Company poses next to the newly launched EcoSport vehicle in New Delhi January 4, 2012.
Reuters / Adnan Abidi

Ford Motor Company (NYSE:F) announced Monday plans to use India as its Asia and Europe manufacturing hub for its most popular vehicle exports in the Asian market.

Ford began shipping its Indian-built EcoSport compact crossover SUV models from its plant in Chennai, a major city on the coast of the Bay of Bengal, on Monday, and intends to market them in Asia and also in Europe.

Responding to growing demand in India for mini-sport utility vehicles, the Dearborn, Mich.-based automaker invested $142 million to set up the EcoSport production line in Chennai.

"We are going to be continuing to export more and more vehicles from India," CEO Alan Mulally said at a news conference. "India is so competitive and the vehicles here are so representative of the vehicles that people want around the world."

Ford also makes the EcoSport in Brazil and China and now India. The company will soon produce the model in Thailand and Russia. Mullay said that he sees Asia-Pacific accounting for 40 percent of vehicle sales in four to five years.

Ford also exports its Figo subcompact hatchback to 38 countries from a different factory in the Indian port city of Chennai. That plant has the capacity to produce 200,000 vehicles and 340,000 engines a year and can produce up to 10 different variants of the EcoSport. Ford's Indian unit also currently produces the Classic and Fiesta midsize cars and Endeavour sport-utility vehicle.

Ford sold 282,000 vehicles in the Asian-Pacific region in the first quarter of 2013, a little less than a fifth of its total global volume. In 2014 Ford will open a $1 billion facility in Sanand, India. That plant will be able to make up to 240,000 vehicles and 270,000 engines a year.